Thursday, December 20, 2012

Transit
district stuck with house after former GM strategically defaults - (www.ochousingnews.com) AC Transit directors sank more than half a million dollars into an
Oakland hills home for their former general manager – and now they’re stuck
with it. The cash-strapped district foreclosed on the four-bedroom house in
July, six months after ex-GM Rick Fernandez stopped making his loan payments. That
has saddled the agency with an estimated $232,000 loss, based on a pair of
loans totaling $500,000 that directors gave to Fernandez starting in 2004, plus
additional sale and foreclosure costs. “It turned out, in hindsight, not to be
a good idea,” said longtime AC Transit Director Greg Harper, who was among the
board majority that supported the loan. The district is now $232,000 underwater
after the former GM strategically defaulted. Yes, it was not a good idea. I
can’t believe the people who approved this aren’t losing their jobs. The loans
were always rather odd. Fernandez first requested $400,000 in 2004 so he could
buy the house that had belonged to his late girlfriend, a former AC Transit
employee, for $350,000. Why does a guy need $400,000 to purchase a $350,000
house? Did he and his girlfriend get a $50,000 signing bonus out of the deal?

Depression Deepens Greek Middle Class Despair With Crime -
(www.bloomberg.com) Anastasia Karagaitanaki, 57, is a former model and cafe owner in
Thessaloniki, Greece. After losing her
business to the financial crisis, she now sleeps on a daybed next to the
refrigerator in her mother’s kitchen and depends on charity for food and
insulin for her diabetes. “I feel like my life has slipped through my hands,”
said Karagaitanaki, whose brother also shares the one-bedroom apartment. “I
feel like I’m dead.” For thousands of Greeks like Karagaitanaki, the fabric of
middle-class life is unraveling. Teachers, salaries slashed by a third, are
stealing electricity. Families in once-stable neighborhoods are afraid to leave
their homes because of rising street crime. Karagaitanaki’s family can’t afford
gas to heat their home this winter and will rely on electric blankets in the
chilly northern Greek city. “We are waiting every month for my mother’s
pension,” Karagaitanaki said. “If my mother dies, what can I do? Everyone here
is dependent on their parents' pensions.”

Greece jobless rate up to 26 percent - (finance.yahoo.com) Greece's unemployment rate rose to 26 percent in September, as the
country heads toward a sixth year of recession. The Greek Statistical Authority
announced Thursday that 1.295 million people were recorded as being unemployed
in September — pushing up the jobless rate up from 25.3 the previous month and
18.9 percent a year earlier. The number of people employed stood at 3,695,053
while another 3,373,692 were listed as financially inactive, according to a
statement with September data.

S&P cuts Greece to 'selective default' - (finance.yahoo.com)
Standard & Poor's has lowered Greece's credit rating to
"selective default" in light of its offer to buy back bonds at well
below their face value. Greece has announced plans to spend up to $13 billion
on the buyback in a bid to bring its staggering debt load under control. S&P
says it sees the buyback as essentially a distressed debt restructuring
tantamount to a default. The rating agency says it may raise its long-term
credit rating on Greece back to junk-grade "CCC" once the buyback is
complete. Greece has fallen under S&P's default rating before. It returned
to junk status this spring after it completed a major debt write-down with
private creditors.

Deutsche Bank Whistleblowers Claimed Crisis Coverup, FT Says
- (www.bloomberg.com) Eric Ben-Artzi, a former quantitative risk analyst for Deutsche Bank AG (DBK),
alleged thatEurope’s biggest lender
engaged in a multibillion-dollar securities violation. Deutsche Bank denied the
allegation. Ben-Artzi, who is suing the company for wrongful dismissal, told
the U.S. Securities and Exchange Commission that from 2007 to 2010 the bank
misrepresented the value of a portfolio with a notional value of as much as
$130 billion, Labaton Sucharow LLP, the New York-based law firm representing Ben-Artzi, said on
its website yesterday. “The
valuations and financial reporting were proper, and a significant portion of
these positions were subsequently unwound in an orderly sale,” Renee Calabro, a spokeswoman for Deutsche Bank
in New York, said in a statement. The
claims were false, and the bank will continue to cooperate with the SEC’s
investigation, she said.

1 comment:

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